Reduced taxes require lower budget obligations - Finance Minister
MOSCOW. May 13 (Interfax) - The tax level in Russia needs to be lowered simultaneously with the federal budget's spending obligations, Russian Finance Minister Anton Siluanov said while presenting at State Duma hearings on the tax policy guidelines for 2014-2016.
"The main task is for our tax system to become competitive because this is a fight for investors," he said.
However, when it lowers taxes, the government must not forget about the function that taxes fulfill in replenishing the budget.
"If we say that we need to lower the tax burden, to give an investment discount for the profit tax, that's fine, but when we had such a discount, the profit tax rate was 35%. We sharply lowered the rate and canceled the tax break. We're ready to move in that direction, but we can't forget about another function of the tax - a source of budget resources," Siluanov said.
That means that "if we lower taxes, we also need to lower budget obligations," the Finance Minister said.
"We say that the insurance premium is high, yes, 30% is indeed high. Then let's conduct pension reforms in such a way that the transfer from the federal budget is reduced. Then we could talk about changing the value of the insurance premium. We can't separate the one from the other," Siluanov said.
Kazakhstan and China are examples of countries with a lower tax burden than Russia with "completely different obligations, particularly in the pension system and social [obligations]. There's no weapons program like we have," he said.
The document will undergo further refinements, which means that it could require review in its final form at the government meeting not on May 16, as previously planned, but later, the Finance Minister said.
"More time might be needed for more detailed refinements to the document, and it could be reviewed at the government a bit later. We'll bring these proposals to the government leadership," Siluanov said.